StockMarketWire.com - Software product group Micro Focus International downgraded its revenue guidance and said its chief executive, Chris Hsu, had resigned.

The company now expected revenue for the year through October to be 6-9% below the prior year. That compared to previous guidance of a 2-4% fall.

The impact of the downgrade on the adjusted Ebitda margin was expected to be mitigated by planned cost cutting, which was tracking ahead of schedule, the company said.

Hsu had resigned with immediate effect 'in order to spend more time with his family and pursue another opportunity', Micro Focus said. He had been replaced by chief operating officer Stephen Murdoch.

The revenue downgrade was blamed on several factors, including disruptions from the implementation of a new IT system, higher staff turnover, continued 'sales execution issues' and disruption of ex-Hewlett Packard Enterprise customer accounts as a result of a de-merger of Hewlett Packard Enterprise.

For the six months through April, revenue on a constant currency basis was expected to fall by 9-12%.

At the midpoint of the revenue guidance range, cost reductions would enable the company to achieve an adjusted Ebitda margin percentage of around 37% in the year through October.

'We remain confident in Micro Focus' strategy whilst recognising that operational issues have led to a disappointing short term performance and outlook,' chairman Kevin Loosemore said.

'We believe that Micro Focus is well positioned to help our customers with the increasing pace of change across their Hybrid IT environments and to deliver customer centred innovation.'









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